Knight Frank have released the Prime Global Cities Index for Q1 2017, and the results show a global surge in luxury residential property, particularly in China’s key cities.
Guangzhou saw the largest percentage change, with luxury prices growing 36.2 per cent over the 12 months to March. Guangzhou outshone its fellow Chinese cities, with Beijing recording average price growth of 22.9 per cent over 12 months and Shanghai recording 19.8 per cent over the same timeframe.
What is the Prime Global Cities Index?
“Prime property corresponds to the top 5% of the housing market in each city, unless otherwise indicated. The index is compiled on a quarterly basis using data from Knight Frank’s network of global offices and research teams.”
Kate Everett-Allen, International Residential Researcher for Knight Frank, attributed these strong growth rates to the fact prices in Guangzhou are rising from a lower base than Beijing or Shanghai.
“The availability of residential stock is tighter and policymakers in the city were slower to introduce cooling measures which are now widely evident across most tier one cities,” said Ms Everett-Allen.
Canadian city Toronto also saw substantial growth, increasing 22.2 per cent over the 12 months to March and outpacing Vancouver (7.9 per cent) by 14.3 percentage points. Toronto’s price inflation was so great that it caused policymakers to announce new regulatory measures, including a 15 per cent foreign buyer tax.
These regulations mirror similar actions taken by New South Wales Premier Gladys Berejiklian in June, in response to the state’s housing affordability crisis. The Premier doubled the foreign investors stamp duty surcharge to 8 per cent.
These regulations will hopefully ease pressure off future property owners, as Sydney saw a 10.7 per cent increase in luxury prices over the 12 months to March.
Melbourne also saw an increase of 8.6 per cent over the 12 months to March.
Overall, the index increased by 4.3 per cent in the year to March.